4imprint Group PLC COVID-19 Update (6978G)
19 Marzo 2020 - 1:00AM
UK Regulatory
TIDMFOUR
RNS Number : 6978G
4imprint Group PLC
19 March 2020
19 March 2020
4imprint Group plc ("4imprint" or the "Group")
Coronavirus (COVID-19): Update
In the light of the rapidly evolving situation resulting from
the spread of COVID-19 and its development into a global pandemic,
4imprint today provides an update on the Group's current trading
and operations.
Our first priority remains the health, safety and well-being of
our people. This will not change. We will be informed by the latest
governmental recommendations and measures and we will play our part
to control the spread of COVID-19.
COVID-19 poses two primary threats to our business
operations:
-- Supply chain disruption. As noted in the Group's 2019 full
year results announcement on 3 March 2020, around 60% of the blank
products that we sell originate in China. In February 2020, at the
height of the COVID-19 disruption in China, this part of the supply
chain was a major concern. However, the timing of the inventory
cycle meant that our domestic suppliers have been able to fulfil
our customer orders since then. At the same time, we have closely
monitored a substantial recovery of production capacity in Chinese
factories. A more pressing supply concern now is the spread of
COVID-19 in North America and the UK and the resulting potential
restrictions on the operations of our domestic suppliers. We have
very strong relationships with our suppliers and we will continue
to work closely with them in the coming days and weeks as the
situation evolves.
-- Demand implications of global pandemic. The rapid spread of
COVID-19 in North America and the UK has now begun to have a
serious impact on demand in our business. In our results
announcement on 3 March 2020, we noted that trading results in the
first two months of 2020 were in line with the Board's
expectations. To be more specific, total orders received were up
more than 13% over the same period in 2019, and this level of
demand activity continued through 9 March 2020. From 10 March 2020
onwards, however, we have experienced a significant reduction in
daily order flow. Over this short space of time, daily order counts
have been very volatile, and have fallen materially to an average
over the last three trading days of around 40% of the prior
year.
We are unable to predict how long this lower level of order
activity will last, but clearly the effects of COVID-19 will impact
revenue and profitability in the current financial year. In the
immediate term we are materially recalibrating our marketing
activities and identifying and implementing cost saving
initiatives, whilst being careful not to compromise the long-term
prospects of the business. We have every confidence in the
flexibility and professionalism of our team members to look after
our customers at this difficult time.
There is no historical precedent in the business for the demand
reduction that we are seeing. At this point the speed and
volatility of the unfolding crisis makes accurate or responsible
forecasting very challenging. We are, however, actively working
through models at various levels of demand and duration that will
help guide our decision making. Additional guidance will be
provided to the market as and when we have more clarity.
4imprint remains very well-financed, with a $51m cash balance at
the end of February 2020 and no debt. Given the strength and market
position of the business prior to the COVID-19 crisis, the Board
remains confident in the ability of the team to manage the business
successfully through difficult times and to protect longer-term
value for all stakeholders.
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/ 2014. The person who
arranged the release of this announcement on behalf of 4imprint was
David Seekings, Chief Financial Officer of 4imprint.
For further information, please contact:
4imprint Group plc MHP Communications
Tel. + 44 (0) 20 3709 9680 Tel. + 44 (0) 20 3128 8100
Kevin Lyons-Tarr Katie Hunt
Chief Executive Officer
David Seekings Rachel Mann
Chief Financial Officer
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END
TSTSFDFWAESSESD
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March 19, 2020 03:00 ET (07:00 GMT)
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